TaxTMI 
TaxTMI 
2016 (2) TMI 643
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....on of Financial Assets and Enforcement of Security Act, 2002 (for short, the "SARFAESI Act"), and followed by violation of the undertaking by the 4th respondent (the Deccan Chronicle Holdings Limited-hereinafter called "DCHL") in W.A. No.679 of 2013 before this Court. In its interim order, in WPMP No.14020 of 2015 in W.P.No.10602 of 2015 dated 09.06.2015, this Court observed that there was no order either of this Court, or of the Debt Recovery Tribunal, in force which prevented the police officers from rendering assistance to the petitioner. While making it clear that they had not issued any direction, as at present, to respondents 1 to 3 to give the petitioner police assistance, this Court clarified that there was no court order preventing respondents 1 to 3 from providing police aid, to the petitioner, if they so choose. Thereafter, the petitioner filed W.P.No.17935 of 2015 seeking a writ of mandamus declaring the action of respondents 2 to 6 in not providing police aid for implementation of the rule of law in discharge of their public duties, in terms of the representation dated 15.06.2015 made by the petitioner seeking necessary police protection for taking absolute contr....
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....loan facility of Rs. 50 crores in favour of DCHL by sanction letter dated 22.06.2010. Thereafter, they accorded sanction for a working capital demand loan facility of Rs. 50 crores which was availed by DCHL, and an equitable mortgage was created by them, in favour of the petitioner, by deposit of title deeds over an extent of 9892.6 sq. yards of land in Survey No.186 situated at Kondapur village along with the buildings located thereupon. DCHL defaulted in repayment of the loan, which resulted in the petitioner classifying their account as a nonperforming asset (NPA). A notice dated 17.08.2012 was issued by the petitioner to DCHL recalling the credit facility, and calling upon them to clear the outstanding amounts due and payable under the credit facilities. The petitioner issued notice dated 25.10.2012, under Section 13(2) of the SARFAESI Act, to DCHL asking them to pay the petitioner the amounts due as on 15.08.2012 along with additional/penal interest. By way of the said notice, DCHL was informed that they were legally bound, under Section 13 (2) of the SARFAESI Act, not to transfer the mortgaged properties by way of sale or otherwise without the prior written consent of the pet....
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....the said amount within the stipulated period, the petitioner was at liberty to proceed against DCHL in accordance with law. According to the petitioner, DCHL neither sought extension of time to comply with the order dated 14.03.2013 nor did they file any application to that effect before the DRT. On the ground that there was no stay operating against the petitioner, with respect to the property at Kondapur as on 15.05.2013, the advocate-commissioner sought to execute the warrant in Crl.M.P. No.123 of 2013 and, at 3.20 P.M. on 15.05.2013, he visited the subject premises along with the authorised officer of the petitioner-bank. At the request of the advocate-commissioner, the Station House Officer, Madhapur PS deputed an assistant sub-inspector of police and four constables to ensure that there was no resistance in taking over possession of the property. The advocate-commissioner conducted a panchanama, and is said to have delivered possession of the property to the authorised officer. W.P. No.14938 of 2013 was filed, by Deccan Chronicle Employees Union (hereinafter called the "Union") to declare the action of the petitioner in initiating proceedings under the SARFAESI Act, and....
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.... to file any such undertaking affidavit, the Writ Petition shall stand dismissed and consequently, the appeal would be allowed. Counsel for the Writ Petition agreed for the same. Similarly, respondent No.1 herein shall also file an undertaking affidavit to the effect that it will cooperate with respondent No.4. There shall be no order as to costs. Miscellaneous petitions pending, if any, in the Writ Appeal as well as in the Writ Petition shall stand closed." The first respondent in W.A. No.679 of 2013 was the Union, and respondent No.4 was DCHL. Aggrieved by the order of the Division Bench in W.A. No.679 of 2013 dated 11.11.2013, DCHL carried the matter in appeal to the Supreme Court and, in its order in SLP (Civil) No.37891 of 2013 dated 17.12.2013, the Supreme Court recorded the request of the Learned Counsel for DCHL for permission to withdraw the SLP with liberty to approach the High Court by filing a review petition. The Supreme Court, while granting permission, dismissed the SLP as withdrawn with liberty as prayed for. DCHL filed W.P.No.5286 of 2014 challenging the vires of Section 2(1)(o) of the SARFAESI Act. They sought a declaration from this Court that the action of....
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....tered into; the consent given was to remove the machinery from the premises in question; Order XXIII Rule 3 had no application; and there was no error apparent on the face of the record so as to review the order passed earlier. The review petition was, accordingly, dismissed. The General Secretary of Union informed the authorised officer of the petitioner bank, by letter dated 15.03.2014, that they undertook to comply with the order in W.A. No.679 of 2013 dated 11.11.2013, and in WPMP No.6563 of 2014 dated 03.03.2014. They requested him to consider postponing his proceedings, for vacating the premises, till Tuesday. They undertook to unconditionally, and without any coercion, leave the premises irrespective of whether there was any order from the management or not, and to peacefully vacate the premises by 10.00 A.M. on 19.03.2014. The said letter dated 15.03.2014 was attested by the General Manager, DCHL, despite which neither the Union nor DCHL have vacated the subject premises till date. The earlier order of the DRT, in SAIR No.167 of 2013 (later numbered as S.A.No.340 of 2013) dated 14.03.2013 was subjected to challenge by DCHL in WP No.8304 of 2014. A Division bench of th....
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....LP and requested this Court to hear and decide the Writ Petition on the next date or, in any case, within three months. Thereafter WP No.8304 of 2014 was taken up for final hearing. The Division bench, in its order in W.P. No.8304 of 2014 dated 05.08.2014, held that there was an effective alternate remedy available to DCHL under Section 18 of the SARFAESI Act. The Writ Petition was dismissed, leaving it open to DCHL to avail its remedies under law. The Division bench made it clear that any observation, or finding made in the Writ Petition could not be construed as a finding of the Court, and it was only for the purpose of disposal of the Writ Petition. The DRT was also directed to dispose of the SA in accordance with law, uninfluenced by any observations made in the order. It is not in dispute that DCHL did not, thereafter, avail the statutory remedy of appeal. The petitioner-bank filed a contempt case alleging violation of the order passed by the Division bench in WA No.679 of 2013 and WP No.14938 of 2013 dated 11.11.2013, and to punish DCHL and the official respondents under the Contempt of Courts Act, which is said to be still pending. It is relevant to note that DCHL have not c....
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....No.384 of 2013 within three months from the date of receipt of a copy of the order, along with the connected S.A. No.340 of 2013. The subject property was auctioned on 27.05.2015, and the bid of Dr. D. Satyanaryana Raju, for Rs. 22.10 crores, was accepted. Sri S. Niranjan Reddy, Learned Counsel for the petitioner, would submit that, while the highest bidder has since deposited the entire sale consideration, the petitioner-bank is unable to deliver possession of the subject property to him as the respondent police officers have expressed their inability to provide assistance to them in taking absolute control of the subject property. Elaborate submissions were put forth by Sri S.Niranjan Reddy, Learned Counsel for the petitioner, the Learned Government Pleader for Home appearing on behalf of the official respondents, and Sri D.V. Sitaram Murthy and Sri Vedula Venkata Ramana, Learned Senior Counsel appearing on behalf of DCHL in W.P.No.10602 of 2015 and W.P.No.17935 of 2015 respectively. It is convenient to examine the contentions, urged by Learned Counsel on either side, under different heads. I. DOCTRINE OF RESTITUTION: ITS SCOPE: Sri S. Niranjan Reddy, Learned Counsel for....
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....iency, in demanding compensation and to be placed in the same situation in which it would have been if the interim order had not been passed against it. The successful party could demand (a) delivery of the benefit earned by the opposite party under the interim order of the court, or (b) to make restitution for what it had lost; and it is the duty of the court to do so unless it feels that, in the facts and circumstances of the case, the restitution, far from meeting the ends of justice, would defeat the same. Undoing the effect of an interim order, by resorting to the principles of restitution, is an obligation of the party who has gained by the interim order of the Court, so as to wipe out the effect of the interim order passed which, in view of the reasoning adopted by the Court at the stage of final decision, the Court earlier would not, or ought not to, have passed. An effort should be made to restore the parties to the same position in which they would have been if the interim order did not exist. (South Eastern Coalfields Ltd.2). While the petitioner can seek damages as compensation for the loss they suffered, and the benefits which the Union and DCHL gained by continuing to....
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....imes to compensation for injury done. Often, the result under either meaning of the term would be the same. Unjust impoverishment, as well as unjust enrichment, is a ground for restitution. (South Eastern Coalfields Ltd.2; Black's Law Dictionary, 7th Edn., p. 1315; The Law of Contracts by John D. Calamari & Joseph M. Perillo). The doctrine of restitution is based on the principle that, on the reversal of a judgment, the law imposes an obligation on the party, who received the benefit of the erroneous judgment, to make restitution to the other party for what he had lost; and it is the duty of the court to enforce that obligation. (Lal Bhagwant Singh v. Sri Kishen Das AIR 1953 SC 136 ; Essar Oil Ltd.,3; Binayak Swain v. Ramesh Chandra Panigrahi AIR 1966 SC 948 ) . The concept of restitution is a common law principle, and it is a remedy against unjust enrichment or unjust benefit. The core of the concept lies in the conscience of the Court which prevents a party from retaining the benefit derived from another which it has received by way of an erroneous decree of the Court. (Essar Oil Ltd.,3) . The obligation to restitute lies on the person or the authority that has received unjust en....
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....may feel encouraged to approach the Courts, persuading it to pass interlocutory orders favourable to them by making out a prima facie case when the issues are yet to be heard and determined on merits and, if the concept of restitution is excluded from application to interim orders, then the litigant would stand to gain by swallowing the benefits which the interim order yielded, even though the battle is lost at the end. This cannot be countenanced. (South Eastern Coalfields Ltd.2). The litigation thereafter had no effect on the order of the Division Bench, in W.A.No.679 of 2013 and W.P.No.14938 of 2013 dated 11.11.2013, and, on the said order attaining finality, DCHL should have vacated the premises, and removed the machinery therefrom, which they have failed to do. It is only because the order of the Chief Metropolitan Magistrate, in Crl.M.P.No.123 of 2013 dated 26.03.2013, was interdicted by the interlocutory order, passed in WP No.14938 of 2013 dated 15.05.2013, was the petitioner prevented from enforcing its rights under the SARFAESI Act to have the machinery of DCHL, lying in the subject premises, removed therefrom. The quantum of restitution, depending on the facts and circum....
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.... in whose favour an order is passed by the Court, suffers at the hands of the other party who has violated the order, cannot be compensated in contempt proceedings. While dealing with an application for contempt, the Court is really concerned with the question whether the earlier decision has been complied with or not. The Court, exercising contempt jurisdiction, is primarily concerned with the question of contumacious conduct of the party who is alleged to have committed default in complying with the directions in the judgment or order. (Special Deputy Collector (LA) v. N. Vasudeva Rao (2007) 14 SCC 165; Union of India v. Subedar Devassy PV (2006) 1 SCC 613 ; Prithawi Nath Ram v. State of Jharkhand (2004) 7 SCC 261 ; and Lalith Mathur v. L. Maheswara Rao (2000) 10 SCC 285 ). In a proceeding for contempt, the High Court can decide whether contempt of court has been committed and, if so, what should be the punishment to be imposed, and matters incidental thereto. In such a proceeding, it is not appropriate to adjudicate or decide any issue relating to the merits of the dispute between the parties. Any direction issued, or decision made, by the High Court on the merits of a disput....
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....h the said order; and, as the disputes between the petitioner and DCHL are in the nature of civil disputes, police officers cannot render assistance, in putting the petitioner in absolute control over the subject property, in the absence of any specific order or direction from this Court. Learned Government Pleader would also rely on Satyanarayana Tiwari17; and Rayapati Audemma18). The order of the Chief Metropolitan Magistrate in Crl.M.P. No.123 of 2013 dated 26.03.2013, and the order of the Division Bench in W.A. No.679 of 2013 and WP No.14938 of 2013 dated 17.05.2013, necessitated compliance by DCHL. Police officers are duty bound to enforce the law, including orders of Courts. The petitioners' representation notwithstanding, the respondent police officers have expressed their inability to render them assistance in the absence of any specific direction or order from this Court. In the absence of an express provision for enforcement of its orders, it is not only proper but also necessary that Courts should render all aid to the aggrieved party to enable him to derive the full benefits of the order. While the aggrieved party can himself approach the police authorities seekin....
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....und by the order; in such a case the aggrieved party can, himself, approach the police authorities and seek their assistance to prevent obstruction to the enforcement of the order, or to the exercise of the right which he derives under the order of the Court; there is no reason why, when the same person brings to the notice of the court that enforcement of the order is sought to be prevented or obstructed, the Civil Court should not exercise its inherent power under Section 151 CPC, and direct the police authorities to render all aid to the aggrieved party in the implementation of the court order; the exercise of such power is necessary to meet the ends of justice or to prevent abuse of the process of court; the Civil Court has ample jurisdiction to pass such an order under Section 151 CPC; and the police are bound to obey such directions. However a slightly different view was taken by a Division Bench of this Court, in Polavarapu Nagamani v. Parchuri Koteshwara Rao 2010 (2) ALD 41 (DB , wherein it was held that in a situation, where threat of violation or disobedience is alleged by the party obtaining a prohibitory order, the Court has the power to direct the police to prevent ....
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....of justice, equity and good conscience which are meant, within the discretionary power of the Court vested by that Article, to do full and complete justice. (Hon'ble Secretary and Correspondent, Badruka College of Commerce and Arts (Day), Hyderabad4). The High Court, in issuing directions, orders and writs under Article 226, can travel beyond the contents of the writs which are normally issued, provided the broad and fundamental principles that regulate the exercise of jurisdiction, in the grant of such writs, are not transgressed. Article 226 empowers the High Court to grant appropriate relief, and also to modify the form of relief according to the exigencies of each case, without being obsessed by the limitations of prerogative writs. There can be no higher purpose than the enforcement of orders of the High Court whereby the rights of a party are either confirmed or recognized. The power of the High Court under Article 226 of the Constitution of India, to enforce its own orders or the orders of the Civil Court, cannot be curtailed. (Satyanarayana Tiwari17; Calcutta Gas Company (Prop) Ltd.27; T.C. Basappa v. T. Nagappa AIR 1954 SC 440 ). As the police authorities owe a legal du....
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....igh Court, where directions are issued, are in the nature of mandatory directions or injunctions; execution of such orders is necessary for obtaining the relief; the order of the Division Bench, in W.A. No.679 of 2013 and W.P.No.14938 of 2013 dated 11.11.2013, is in the nature of a decree against DCHL; the said order dated 11.11.2013 is an executable decree which, in terms of Rule 23 of the Writ Proceeding Rules, can only be executed by the Civil Court; the order of the Division Bench dated 11.11.2013 requires execution through the process of Court, and not through police officers; the police officers can, at best, assist in execution of the order of the High Court through the process of the Civil Court i.e., the Court of the Principal District Judge which is a Court of unlimited jurisdiction; and, even in the absence of any specific provision, the High Court has the inherent power to direct the Civil Court to execute the order of the Division Bench dated 11.11.2013 which is an executable decree. The Civil Procedure Code prescribes the procedure for execution of decrees passed by a Civil Court of competent jurisdiction. There is no provision therein for enforcement of orders of ....
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....thy, Learned Senior Counsel appearing on behalf of DCHL in W.P.No.10602 of 2015, would submit that, for failure to comply with the order passed by the Chief Metropolitan Magistrate under Section 14(1) of the SARFAESI Act, the petitioner has an effective alternative remedy of approaching the Chief Metropolitan Magistrate himself under Section 14(2) thereof; and, as the petitioner has an effective alternative statutory remedy, the jurisdiction of this Court, under Article 226 of the Constitution of India, cannot be invoked. Learned Senior Counsel would rely on Polavarapu Nagamani23; Vemula Prabhakar v. LAO and RDO, Peddapalli, Karimnagar Dt. 2002 (1) ALD 200 (FB) ; and the order of the Debt Recovery Appellate Tribunal in Appeal No.44 of 2015 dated 26.05.2015. Section 14 of the SARFAESI Act requires the Chief Metropolitan Magistrate or the District Magistrate to assist the secured creditor in taking possession of the secured asset and, under sub-section (1) thereof, where the possession of any secured asset is required to be taken by the secured creditor, or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, t....
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....ndia. Reliance placed by Sri D.V. Sitaram Murthy, Learned Senior Counsel, on Vemula Prabhakar31 is misplaced. In Vemula Prabhakar31, a Full Bench of this Court held that, in view of the provisions contained in Section 53 of the Land Acquisition Act, an execution petition under Order 21 CPC was maintainable even for executing a decree passed by a Civil Court in a reference under Section 18 of the Land Acquisition Act; mere absence of the ingredients of coercion against the State, and/or Collector, in executing the decree, was no ground for by-passing such a civil remedy; the provisions contained in the Civil Procedure Code, dealing with the execution of a decree, were wide; it could not be said to be an ineffective remedy; the submission that an award made by a Civil Court, being a right of property under Article 300-A of the Constitution, can be enforced through a writ of mandamus could not be accepted; a decree passed, in terms of Section 18 of the Land Acquisition Act, was a money decree; and, if the aforementioned proposition was accepted, all money decrees, passed against the Government, could be directed to be executed through a writ of mandamus. In B. A. Bhavani29, a Large....
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....n abuse of process of the Court for any person to approach the High Court, under Article 226 of the Constitution, seeking a writ of mandamus directing police officers to protect his claimed possession of property without first establishing his possession in appropriate legal proceedings. The temptation to grant relief, in cases of this nature, should be resisted by the High Court. (P.R. Murlidharan19). A writ for "police protection", so-called, has limited application to cases where the Court is approached for protection of the rights declared by a decree, or by an order passed by the Court. It cannot be extended to cases where rights have not yet been determined either finally by the Court or at least at an interlocutory stage in an unambiguous manner, and even then only in furtherance of the decree or order. (P.R. Murlidharan19). While exercising jurisdiction under Article 226, the High Court would not, collaterally, determine disputed questions of fact. (P.R. Murlidharan19). This Court would not exercise jurisdiction, under Article 226 of the Constitution of India, save on a clear case, of a legal injury having been caused to the person who has invoked its jurisdiction, being ma....
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....ntrol of the subject property, to the exclusion of DCHL or the Union, is yet to be determined. It is not even the case of DCHL that disputed questions of fact are involved in the present case which necessitate adjudication in appropriate legal proceedings. By its order in W.A. No.679 of 2013 and W.P. No.14938 of 2013 dated 11.11.2013, the Division Bench had directed DCHL to vacate the premises by 28.02.2014 and remove all machinery available therein. As possession of the subject premises was already handed over to them, the Division Bench also permitted the petitioner to take further steps to sell the property in order to recover the amount due to them. Consequent upon the review petition, in review WPMP No.1156 of 2014 in W.A.No.679 of 2013, being dismissed on 14.03.2014, the earlier order of the Division bench, in W.A.No.679 of 2013 and W.P.No.14938 of 2013 dated 11.11.2013, attained finality. In such circumstances there is no reason why this Court, in the exercise of its extra-ordinary jurisdiction under Article 226 of the Constitution of India, should refrain from granting the petitioner the benefit of restitution. A mandamus shall issue to the respondent police officers to pro....
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....first limb relates to inaction of the police in not considering the representation dated 15.06.2015, the second limb is for a direction to the police to put the petitioner in absolute control; even if the first limb of the prayer is allowed, the only direction which can be issued to the police officials is to act upon the petitioner's representation dated 15.06.2015; the first limb of the prayer contradicts the second limb; the twin prayers in the Writ Petition are self-contradictory; and, if the first limb of the prayer is granted, there would be no necessity to grant the second limb of the prayer, as grant of relief of the first limb would result in the petitioner achieving what it wanted. On the other hand Sri S. Niranjan Reddy, Learned Counsel for the petitioner, would submit that the complaint in the Writ Petition is that police officers are not performing their public duties; no relief has been sought to direct police officers to dispose of the petitioner's representation; the petitioner has not only sought police aid in removing the machinery of DCHL, they have also sought assistance to take absolute and exclusive control over the subject property; they were unable to do ....
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....ank afresh, and in accordance with law. However, the stand of the respondent-police officers, in their counter-affidavit filed before this Court, is that they would not be able to render police assistance in the absence of any specific direction from this Court. No useful purpose would, therefore, be served in directing them to re-consider the representation of the petitioner-bank seeking police aid. We see no inconsistency between the first limb and the second limb of the prayer as the second limb is merely a consequence of the first. In any event the High Court, while exercising jurisdiction under Article 226 of the Constitution, has the power to mould the relief taking into account the totality of the circumstances and the exigencies of the situation. (D. Satyanarayana v. N.T.Rama Rao AIR 1988 A.P. 144). VIII. CONCLUSION: DCHL has failed to comply with the conditional order passed by the DRT, in SA No.340 of 2013 dated 14.03.2013, to deposit Rs. 10 crores, and has merely deposited Rs. 1 crore that too long after the time stipulated therefor had expired. They have repeatedly used the judicial process to deny the petitioner their right to enforce the mortgage in terms of the....